Press release after the Bank of Slovenia Board Meeting on 5 March 2013
1) The Governing Board of the Bank of Slovenia discussed current supervisory matters.
2) The Governing Board of the Bank of Slovenia discussed current economic and financial developments, and approved the release of the Economic and Financial Developments document for February 2013 and the Report on International economic relations (External Statistics) December 2012.
Economic activity declined in the final quarter of 2012 in line with expectations, taking the overall decline in the year to 2.3%. The figures currently available also suggest quite a sharp decline in activity in 2013. The decline in private sector demand deepened at the end of last year. Investment activity and household consumption continued to decline. The latter was the result of high unemployment, general uncertainty and, in part, fiscal consolidation measures. Despite the adverse situation in the international environment, growth in exports remains positive, primarily as a result of growth in exports of services, while merchandise exports are only increasing to non-EU countries.
The situation on the labour market is deteriorating, as evidenced in rising unemployment, which had reached 9.6% by the final quarter of 2012. The workforce in employment fell sharply in the majority of the private sector, while the rise in employment in public services stalled. Nominal wages were down in year-on-year terms at the end of the year, in keeping with the vital cost adjustment in the economy and the maintenance of wage growth below productivity growth.
Inflation was unchanged in the early part of this year, but nevertheless remains higher than the euro area average. The effects of past and additional consolidation-related measures will also be felt in the coming months. Core inflation will remain low. Prices of products dependent on domestic demand will again rise slowly or even fall this year, as a result of caution on the part of consumers and the decline in purchasing power.
The Bank of Slovenia expects the new government to continue the fiscal and financial stabilisation, to decisively support a proper solution for rescuing the banking system, and to provide impetus to the economy in part by restructuring the real sector and deleveraging the corporate sector.
3) Report on payment systems operations in the final quarter of 2012.